Tuesday, 18 October 2016

Vacancies up slightly year-on-year

SQM Research reported that year-on-year vacancy rates are slightly higher.

Sydney and Melbourne reported vacancy rates of 1.8 per cent and 2 per cent respectively.

In Brisbane, where there is still a significant pipeline of inner city apartments set to hit the market, vacancy rates are 2.9 per cent.

Perth's vacancy rate was steady from the previous month at 5 per cent, while the Darwin market appears to be have steadily improved with vacancy rates at 3.1 per cent.

The tightest markets are Hobart (0.6 per cent) and Canberra (1.1 per cent), and asking rents have increased accordingly in these cities.

Smoothing the data shows that over the past year vacancy rates have been relatively flat in Sydney and Melbourne, but vacancies have generally been elevated in the resources states.

This has been reflected in soft rents in Perth and Darwin.

Despite the apartments pipeline asking rents for units are higher year-on-year in each of the three most populous cities, particularly in Sydney (+4.4 per cent) and Melbourne (+5.1 per cent) as the new stock comes online.

Concluded SQM Research:

"Looking forward, vacancies are likely to rise in Melbourne, Brisbane and Sydney over 2017 as more new high-rise apartment developments come onto the market.

However, we maintain that the oversupply issue appears to be constrained to concentrated areas such as the inner-city regions.

We are not as confident we will see a contagion affect where the whole capital city market is affected."